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HSBC apologises for UnionPay ATM-card fiasco in Hong Kong

Howard Winn

BIO

Howard Winn has been with the South China Morning Post for two and half years after previous stints as business editor and deputy editor of The Standard, and business editor of Asia Times. His writing has also been published in the Far Eastern Economic Review, the Wall Street Journal, and the International Herald Tribune. He writes the Lai See column which focuses on the lighter side of business.

Ever since HSBC started sending out its new ATM cards with an embedded chip, internet chat rooms and our own organ's letters page have been humming with disgruntled HSBC customer complaints. The problem is that customers have been unable use the card to withdraw cash from their accounts in many parts of the world, aside from the mainland.

Lai See approached HSBC to ascertain what progress they were making in finding a solution to the current mess. They responded by saying:

"We apologise to the customers who have been inconvenienced by the new arrangement. Customer feedback is important to us. We are working on improving the ATM access in markets including those mentioned by your readers and we hope more details can be provided soon. Similar to most banks in Hong Kong, UnionPay was chosen as the network provider for ATM chip cards. A majority of our customers increasingly uses cash withdrawal services in China and Asia. We encourage customers who have encountered problems in markets covered by UnionPay's network to contact us so we can investigate the cases individually. In the meantime, HSBC customers can link their bank accounts to their Visa/MasterCard credit card to use the ATM services of the PLUS/Cirrus network."

HSBC's problems started when it issued the new cards with only one global payment network - UnionPay. Previously it used the Plus network which can be used more widely than UnionPay. Banks issuing ATM cards in Hong Kong were instructed by the Hong Kong Monetary Authority to adopt chip-based ATM cards to increase the security of the card. In an earlier story by the SCMP, an HSBC spokesman said: "For security reasons, we are allowed to link to only one pay system. We use UnionPay."

A Hong Kong Monetary Authority spokesman said it did not insist on this requirement and when asked to elaborate HSBC responded: "UnionPay was chosen as the sole ATM network provider for our chip cards as part of an agreement the details of which are confidential."

Chip-embedded ATM cards issued by other banks in Hong Kong appear to have only one international payment network on their cards. But they appear to have avoided the mess that HSBC has ended up in by giving its customers a choice of cards.

Standard Chartered, for example, offers a card connected to the Jetco payment network for use in Hong Kong and Cirrus for international use. It also has a card with both Jetco and UnionPay. This may well be the path which HSBC will have to adopt. To paraphrase Winston Churchill: "You can always count on them to do the right thing, having tried everything else."

Malhotra's handicap

We were interested to read in Institutional Investor that Vikram Malhotra of Credit Suisse is an avid golfer. Being a golfer in investment banking circles is not unusual, it's almost obligatory since a good deal of client work occurs on the golf course. But he's unusually good at it with a handicap of three. But, canny banker that he is, he doesn't let his competitive streak get in the way of business. "I make sure I play on the same side as my clients," he says.

An expansive dinner

The chief executive, CY Leung, resorted to taking pro-establishment lawmakers to dinner to win their support for the expansion of landfills. (Hopefully the exercise fell within government guidelines on entertaining.) But it all seems to have been in vain since the likes of Regina Ip Lau Suk-yee told him that attempting to force the issue through the Legislative Council would be "political suicide". Ip's colleague, Michael Tien Puk-sun, added his two cents, saying that the government would need to sweeten the deal with electricity subsidies.

The Environmental Protection Department would no doubt be delighted to get the expansion through Legco. But it would be embarrassed by the Tien sweetener, since it is trying to persuade everyone to use less, not more electricity.

Leadership and the London Business School

We recently wrote a piece headlined "The unimportance of sleep" about a poll conducted at the 2013 Global Leadership Summit which was organised by the London Business School and not, as we said, the London School of Economics.

To counter the argument that "HSBC customers can link their bank accounts to their Visa/MasterCard credit card to use the ATM services of the PLUS/Cirrus network" - this is by no means an easy solution. I experienced great trouble while traveling in Portugal in May, as ATM machines did allow me to access money from my HSBC HK Visa card - but the cash was not withdrawn from my Savings account, it was interpreted as a cash withdrawal on my credit card at the cost of about HKD110 per transaction!In fairness, HSBC did refund those charges after I returned home and complained bitterly about my predicament in getting cash, as my "real" ATM card was refused at every bank ATM in that country and HSBC has no presence in Portugal at all.I am now planning to open an account at Standard Chartered, as this problem in Portugal is merely the latest in a series of problems I've had with HSBC lately, despite being a Premier customer for over 15 years. Enough!!! Standard Chartered - I look forward to doing business with you!

caractacus Jun 7th 20133:43pm

HSBC says sorry, but promises only vague action aimed at solving the problem. We shall see how sincere that is. No doubt the contract with UnionPay is advantageous to HSBC, but they never gave a thought for the millions of their customers who are stuck with a substandard service.

ssslmcs01 Jun 12th 20138:10pm

It is ridiculous that HSBC would state that most of its customers are withdrawing money in China and Asia so they chose union pay as their network; while PLUS is still everywhere in Asia as well as throughout China. My wife is from China and her relatives chose to open their accounts in Hong Kong, before this fiasco because they thought they could access their money overseas as well as in China throught the PLUS System. My wife's cousin (unlike me he is a Premier customer) has decided to move his account to the United States during his trip there later this summer. I'm sure there are more Chinese planning to do the same thing. The question the mainlanders are asking is "Why open an account with Union Pay in Hong Kong when I can do that in China?"In addition to that, I have tried my Union Pay card in Shen Zhen and was told network problems (no cash dispensed). I used my Visa card through the PLUS System to withdraw money from the same account at the same machine, the Bank of China in Lo Wu (main branch) has both networks connected to the same machine, works fine. So their theory doesn't work. I have also had my Union Pay card fail in Thailand while PLUS worked fine. I have used PLUS system in Singapore, Malaysia, Indonesia, Korea and Taiwan within the last few years. Only once did I have a problem with PLUS (money came out of my account but not the machine, credited back to my account in about 2 months).

brahardja Jun 8th 201312:43pm

Just went to Athens and Istanbul, where around 1 out of 30 ATMs accept union pay. So much for being a global bank.

KwunTongBypass Jun 7th 20132:47pm

Would HSBC please explain the fees after I have "linked my bank accounts to their Visa/MasterCard credit card to use the ATM services".

a year ago, i found out my friend was paying half of what i was paying for travel insurance, even though her $ coverage was much better than mine. i was using HSBC travel insurance. she was using Standard Chartered travel insurance. that was a year ago. needless to say, I'm a Standard Chartered customer now. HSBC = horse sh*t british c*nts